France defeats EU push to prune back vineyard protections

 

France defeats EU push to prune back vineyard protections

 

Wine industry holds onto planting limits that it says prevent ‘Coca-Cola wine’ from flooding the market.

 

BY EDDY WAX

February 19, 2021 1:14 pm

https://www.politico.eu/article/france-wins-wine-battle-with-brussels-vineyard-protection/

 

France may be a nation of wine drinkers but its government wants grapes to be grown in moderation.

 

The country of Chablis and Champagne has won a battle in Brussels to prolong special EU rules that were designed to stop wine flooding the markets by tightly capping the growth of Europe’s vineyards.

 

Winegrowers enjoy these protections which guarantee them profits and predictability, on top of their generous EU farm subsidies, but the French victory is a blow to the European Commission, which has spent years arguing they are strangling the sector and preventing it from modernizing in an era of rising global competition and climate change.

 

As the future EU farm policy is hammered out in Brussels, the Commission’s liberalizing agenda was outgunned by a French-led coalition of wine-growing countries and powerful industry lobbyists determined to cling onto a system they say preserves Europe's patchwork model of family-run vineyards, as opposed to larger scale production in countries like the U.S. and Australia.

 

“By managing the potential of production and maintaining more or less the current level, we can guarantee this mosaic effect," said Thierry Coste, a French winegrower from EU farmers’ lobby Copa & Cogeca, who warned that pruning back the vine rules could lead to an "industrial, Coca-Cola kind of wine" taking root in Europe.

 

Under EU rules, farmers in the bloc's main wine-producing countries such as France, Spain and Italy, can only grow grapes if they obtain special vine-planting permits, which are in limited supply because each year a country can only expand its vineyards by 1 percent of the space they already take up.

 

Producers of top-of-the-range wines from Bordeaux to Rioja who benefit from lucrative EU labels that secure their intellectual property and increase their market access abroad, are afraid that an oversupply of wine will devalue their precious vintages.

 

The French and Spanish governments agree, warning in an 11-country declaration last year that “untangled deregulation would lead to an industrialization of wine production and to the disappearance of family holdings."

 

During closed-door negotiations in recent weeks on the Common Agricultural Policy (CAP) reform, EU governments and the European Parliament struck a provisional deal to extend the supply controls from their planned end in 2030 until 2045, three EU diplomats told POLITICO. The Commission wanted no decision to be taken until after a scheduled review in 2023.

 

 

French Socialist lawmaker Éric Andrieu, who was the Parliament’s lead on the file and was pushing for an extension to 2050, can claim an almost total success, while his shadow rapporteur and compatriot Anne Sander, a center-right MEP, welcomed the deal as “great news.”

 

France vs. the Commission

The French-driven agreement was tied up despite dire warnings from the Commission about the long-term consequences of maintaining such a system.

 

EU civil servants say the extension will lock in exorbitant land prices barring younger, greener and more innovative farmers from replenishing Europe's ageing stock of winegrowers, and that it leaves the sector ill-prepared to respond to the curveball of climate change or variations in the kinds of wine consumers want to drink.

 

"There is no political and economic justification for the continuation of these restrictions," a Commission spokesperson said, as CAP talks kicked off late last year.

 

The Commission wants to chip away at the unique protections enjoyed by the wine industry, which is now the only agricultural sector in the bloc to still benefit from cushy production quotas, after Brussels abolished limits on sugar and dairy in recent years.

 

But winegrowers’ lobbyists appear to have dug a deep moat around the EU protections they currently enjoy, no doubt emboldened by their experience during the last reform of the CAP, when they helped to topple plans cooked up by EU governments to fully liberalize the wine market.

 

Seeing itself outmuscled, the Commission acquiesced to an extension of the system during CAP talks in recent weeks, on the proviso that the annual limit be doubled to 2 percent after 2030, according to an insider who is familiar with the Commission's position in the talks.

 

"The risk is that there will be a legal challenge from a young winegrower [for example] in Provence, to say it is rigged, there’s no access to the sector and it’s basically a privileged few who enjoy a monopoly," the person said.

 

But that appears to have got short shrift from the other EU institutions and was publicly rejected as “detrimental” by EU wine lobbyists such as independent winegrowers’ group CEVI.

 

What is more, young farmers themselves are against it.

 

“A limit of 1 percent is not limiting access for young farmers to get access to new plantations,” said Samuel Masse, a 32-year-old French farmer who grows organic grapes outside Montpellier, said over the phone, as the sound of his electric vine-pruning shears whirred in the background.

 

Masse, who is the president of the European Council of Young Farmers, said the 1 percent limit is crucial for securing high-quality wine production and decent incomes for farmers but that the system should be tweaked so that young farmers are first in line for authorizations.

 

Fizzing for flexibility

Italy, the bloc's largest exporter by volume, has a more nuanced stance than France or the bulk of the EU winegrowers’ lobby when it comes to the future of vine planting.

 

That is partly down to a boom in demand for Italian wines such as Prosecco, which has led to a gold-rush for new planting rights in the north east of the country, and is prompting some growers to chafe at the restrictions of the EU supply controls.

 

Although only around 7,000 hectares of new vineyards were up for grabs in 2018 in Italy, requests were made to plant some 64,000 hectares, far more than in any other country where the same EU scheme applies, according to Commission stats.

 

Italy's wine lobby doesn't want a higher percentage cap, but it would like the system to allow countries to recycle the authorizations that are currently lost when a vineyard is abandoned.

 

There may still be time for the Italians to get their way in the CAP talks because nothing is agreed until everything is agreed, and the negotiations aren’t expected to be finalized until May.

 

Wine mulled

The Commission's agenda is also being rejected because of the grim prospect of slashing away the protective vine limits just as Europe's wine sellers are finding themselves hemmed in by eye-watering U.S. tariffs and restaurant closures.

 

“In this moment, liberalization could produce a severe impact on the sector," said Roberta Sardone, from CREA, an agricultural research center linked to the Italian farm ministry.

 

But although Sardone said a full bonfire of red tape would be too risky, she nevertheless argued the current way the system functions is overly burdensome.

 

She also said the limitations bode ill for the onslaught of climate change, which has already started forcing growers to turn to consider more heat-resistant grape varieties or change their hallowed planting techniques.

 

Spain — another giant wine producer, which has backed the French push — only uses half of its 1 percent quota for vineyard expansion, justifying its super-cautious approach by arguing that climate change risks turbo-charging wine production.

 

"Climate change is readily evolving and all this may require more capability of the sector to adapt to the new conditions. And I think that this scheme is a limit to this development,” Sardone said.

 

Giorgio Leali contributed reporting.